Centralized Exchange (CEX)

The private corporations that facilitate the trading of crypto assets are called centralized crypto exchanges (CEX). These centralized platforms provide an interface for crypto investors to buy and sell crypto tokens using their fiat currency. Alternatively, one type of crypto token can also be converted into another type of token with the help of these crypto exchanges.

These crypto exchanges act as middlemen between the buyers and sellers of digital assets. They have payment systems in place to help the investor or trader conduct their exchange. These exchanges are custodial in nature. They hold the funds of the users and the digital assets in the crypto wallets acting as central authority authenticating all the transactions being undertaken.

There are a few advantages of centralized exchanges such as additional security, improved user experience, and other rewards and services.